Dollar flat vs Yen as traders look for U.S. cues

HiroyukiKachi

The dollar was largely unchanged against the yen in Asia trade Tuesday, as market participants again stayed on the sidelines waiting for trading cues from the U.S. following an overnight slide in the dollar below Y102 as Treasury yields fell.

The U.S. currency dipped briefly in the morning following Japanese trade figures and a weak start to stock trading but returned to earlier levels in tandem with a rebound in share prices.

Investors will monitor earnings results from U.S. companies starting with Alcoa later in the day for possible pointers to what impact corporate performance in the U.S. has on stock prices.

As of 0450 GMT, the dollar was at Y101.81 after falling to Y101.68, following trade data from Japan that showed a current account surplus for the fourth straight month in May.

The Ministry of Finance said Japan logged a surplus of Y522.8 billion in May, compared with a Y442.5 billion surplus forecast by economists surveyed by The Wall Street Journal and the Nikkei.

The benchmark Nikkei Stock Average was down 0.3% at 15335.35 mid-afternoon after hitting an intraday low of 15225.11 following the trade data and overnight falls in the dollar.

Investors will continue looking for trading hints from the U.S. If stock prices there maintain their ongoing strength following brisk corporate earnings performance, downward pressure on Treasury yields will likely weaken, pushing up the dollar against the yen.

"That's the only factor drawing attention," in otherwise thin trading in the market, said Shigetake Nakayama, senior manager of foreign exchange trading department at the Bank of Tokyo-Mitsubshi UFJ.

Still, with market expectations high for upbeat earnings, negative readings could cause position adjustments, pulling down the dollar against the yen, said Mr. Nakayama. He expects the dollar will hover between Y101.50 and the lower half of the Y102 range.

Among other currency trade pairs, the euro was at $1.3603 from $1.3604, while the common currency was at Y138.51 from Y138.58.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.01% at 72.95.

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